What are some top performance appraisal methods for startups?

An appraisal is an assessment of an employee’s performance, both quantitative and qualitative, over a period of time. This is a very important process, and forms an important part of a company’s operations. Appraisals are even more pertinent for startups, because they can determine the success or failure of the organization. An appraisal consists of two parts – evaluation of past performance as well as discussing about future prospects and maximizing success.

A lot of factors need to be taken into consideration when performing appraisals, which revolve around a person’s abilities and skills. Methods of appraisal are then determined based on these considerations. These can be either past-oriented or future-oriented. Let’s take a look at the best top performance appraisal methods that startups can implement.

Best Appraisal Methods for Startups

Essay Method

As the name suggests, the essay method involves a person from senior management writing a detailed essay evaluating the performance of an employee. This essay can be written by a supervisor, team leader, manager, or any person in senior role. The essay method allows an employee to receive feedback directly from the person whom they are working closely with and who is assessing their performance. This adds a personal touch, along with a detailed assessment.

However, the essay method runs the risk of becoming biased. Also, the effectiveness of the message depends on the communication skills of the user.

Critical Incidents Method

This appraisal method takes place over a period time, unlike the essay method. The supervisor, team leader, or manager, someone who is directly associated with the employee, evaluates his or her performance. A record is kept of the employee’s reactions to various critical incidents as and when they occur, and these are rated on various levels.

The advantage of this method is that the employee’s actual reactions and behavior on the job are assessed. The drawback, however, is that this method too runs the risk of bias or the forgetfulness of human nature.

360-Degree Feedback

This is a broader appraisal method in the sense that it involves more people than just the senior management. All the individuals who interact with the employee on a regular basis are asked to evaluate his/her performance. Additionally, the employee is also asked to assess his/her own performance.

The advantage of this appraisal method is that it offers a broader perspective of an employee’s performance from a variety of individuals, and the employee him/herself. This enables more scope for development and introspection.

Field Review Method

In this appraisal method, the person appraising the employee belongs to a department that’s related to the employee’s department. The field review method is helpful whilst evaluating employees in higher positions, like managers.

This is a slightly more time consuming method, since the appraiser has to conduct some research and observe the employee closely to assess his/her performance.

Behaviorally Anchored Rating Scale

In this method, the appraiser is presented with a variety of sentences that point to behavioral aspects and characteristics. He/she then selects the ones most apt to the employee being appraised. The accuracy of the ratings depends on the rater’s bias and ability to provide reasonable assessment.

The more people that are involved in the process, the broader the perspective of the employee’s performance. It serves are a better-rounded appraisal.

Compliance with Management Objectives

As the name suggests, this appraisal method is conducted based on the objectives set forth by the management, and an employee’s abilities and skills to achieve them. This method basically revolves around setting forth certain goals and aims for an employee and his/her ability to meet them, affects the ratings that he/she receives. The standards of performance that the management sets forth form the basis for their appraisal of the employee’s performance. A comparison is made between the goals set and goals met.

In Conclusion

Most of these aforementioned appraisal methods are effective in terms of time and cost. Hence, they are perfect for startups. However, every startup is different, and hence, certain methods may be more suited than others. The best way to assess this is by conducting research and analyzing the practicality and reasonability of each. Then the process becomes a lot easier.

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Our inhouse authors have expertise in several areas of HR and Payroll. Their content contributions have been published in leading blogs, websites and print publications.

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